Jonathan Gruber

individual
© Image Copyright : Photo from Wikimedia Commons / Author of Photo: United States House Committee on Oversight and Government Reform

Overview

  • Longtime MIT economics professor
  • A chief architect of the Patient Protection and Affordable Care Act (a.k.a. Obamacare)
  • Acknowledged that he and the Democrats had knowingly and repeatedly lied about key aspects of Obamacare so as to deceive American voters who were “too stupid” to realize what was happening

Born on September 30, 1965, Jonathan Holmes Gruber earned a BS degree in economics from the Massachusetts Institute of Technology (MIT) in 1987, and a Ph.D. in that same discipline from Harvard University in 1992. He has taught economics at MIT since 1992, except during a brief period (1997–98) when he served as Deputy Assistant Secretary for Economic Policy at the U.S. Treasury Department.

In a paper he co-authored in May 1997 for the National Bureau of Economic Research, Gruber and two fellow writers asserted that abortion, since its legalization nearly a quarter-century earlier, had had a positive net effect on America’s social and economic life:

“We find evidence of sizable positive selection: the average living circumstances of cohorts of children born immediately after abortion became legalized improved substantially relative to preceding cohorts, and relative to places where the legal status of abortion was not changing.

“Our results suggest that the marginal children who were not born as a result of abortion legalization, would have systematically been born into worse circumstances had the pregnancies not been terminated: they would have been 70% more likely to live in a single parent household, 40% more likely to live in poverty, 35% more likely to die during the first year of life, and 50% more likely to be in a household collecting welfare.

“The last of these finding implies that the selection effects operating through the legalization of abortion saved the government over $14 billion in welfare payments through the year 1994.”

From 2003–06, Gruber was a key developer of the Massachusetts healthcare reform plan instituted during the administration of then-governor Mitt Romney.

In 2006 Modern Healthcare magazine named Gruber as one of “The 100 Most Powerful People in Health Care in the United States,” a designation he would earn again six years later. In 2011 he was named one of “The Top 25 Most Innovative and Practical Thinkers of Our Time” by Slate magazine.

In 2008 Gruber served as a consultant to the presidential campaigns of Hillary Clinton, John Edwards, and Barack Obama. Obama in particular had admired Gruber’s intellect for some time, having named him during an April 2006 Brookings Institution panel discussion as one of “the brightest minds from academia and policy circles” whom he (Obama) had “stolen ideas from liberally.”

In 2009-10 Gruber served as a chief “architect” of the Patient Protection and Affordable Care Act (a.k.a. Obamacare). By Gruber’s own account, he “helped write the federal bill” and “was a paid consultant to the Obama administration to help develop the technical details as well”—services for which the Department of Health & Human Services (headed by Kathleen Sebelius) paid him $392,600.

All told, Gruber earned some $5.9 million from federal and state government sources for his consulting services between 2000-14. This included $2.05 million from the National Institutes of Health (for work related to Medicare Part D), $1.7 million from the Justice Department (for “expert witness” testimony), and $103,500 from the State Department (for legal services). Also highly lucrative was his “Gruber Microsimulation Model” (GMM), which helped Obamacare’s authors anticipate whether the Congressional Budget Office (CBO) would (correctly) interpret various features of the Affordable Care Act as “taxes.” The GMM afforded those authors—who understood that such an interpretation could entirely thwart the prospect of passing the legislation—an opportunity to deceptively tweak the wording of the bill accordingly. At least eight U.S. states—Colorado, Connecticut, Maine, Michigan, Minnesota, Vermont, West Virginia and Wisconsin—also contracted with Gruber to gain access to his computer model.

In 2009 Gruber attended five of the twelve White House meetings where top experts gathered to discuss the design of Obamacare. One of these was a July 20 gathering that Obama himself attended. Between 2011 and June 2014, Gruber visited the White House at least 19 times.

Though Gruber (like Barack Obama) has long favored the implementation of a government-run, single-payer healthcare system, he refrained from drafting such a plan in 2010 because he understood that the American public would have opposed it. As he said in a 2010 speech at MIT, single-payer was “just politically impossible in the U.S. context” because: (a) “most Americans are actually pretty happy with what they have and aren’t willing to give it up,” and (b) “we have about an $800 billion a year private health insurance industry that’s not going to go without a fight.”

At a January 2012 healthcare town hall event in Seattle, Gruber said that in the event that Obamacare did ultimately not prove to be successful at controlling healthcare costs without a public option, “we’ll have to revisit single-payer.”

That same month, Gruber made it clear that Obamacare subsidies—for people whose incomes were low enough to qualify them for government assistance in paying their insurance premiums—would only be available through state exchanges (i.e., marketplaces). In other words, there would be no provision in the law for a federal exchange (marketplace). “I think what’s important to remember politically about this,” he told an audience in Virginia, “is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits. Your citizens still pay the taxes that support this bill. So you’re essentially saying to your citizens, you’re gonna pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality the states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges and will do it. But, you know, once again, the politics can get ugly around this.” Ultimately, only 14 states accepted federal money to help them set up their own exchanges.

During a San Francisco podcast appearance in January 2012, Gruber acknowledged that he had frequently tried to prevent the American public from realizing that neither he nor his fellow Obamacare creators really knew how to keep the costs of healthcare down: “You get demagogued. You get shouted down by people making stuff up. Even if we knew how to control health care costs, we couldn’t do it politically. So what do you do? You’re President Obama and the Congress. You promised you’re going to control health care costs. Your pollsters have told you that the American public doesn’t actually care about insurance coverage, all they care about is health care cost. What do you do? Well, you do what I like to think of as sort of a ‘spaghetti approach.’ Throw a bunch of stuff against the wall and see what sticks.”

Gruber has been a longtime supporter of healthcare systems designed to facilitate the redistribution of wealth by subsidizing—as Obamacare did—the medical expenses of people with lower incomes. In November 2013, he was quoted in the New York Times saying that “a fair and fixed insurance market” would be impossible to create “without some redistribution away from a small number of people.”

In early November 2014, Gruber became engulfed in controversy when video clips of some of his past speeches on Obamacare came to public attention. In those clips, Gruber could be seen boasting that he and the Democrats had knowingly and repeatedly lied about key aspects of the legislation so as to deceive American voters, whom the professor characterized as “too stupid” to realize what was happening. Some examples:

  • During a videotaped October 17, 2013 panel discussion (at the University of Pennsylvania) about the political hurdles that Obamacare had faced in 2009-10, Gruber openly acknowledged that, contrary to the Obama Administration’s claims, the Affordable Care Act’s individual mandate—requiring every American to purchase health insurance—was in fact a massive tax. But “this bill was written in a tortured way” to conceal that politically unpalatable fact from the CBO, Gruber explained. Similarly, he said, “if you had a law which … made explicit that healthy people pay in and sick people get money, it would not have passed.” “Lack of transparency,” he elaborated, “is a huge political advantage. And basically, you know, call it the stupidity of the American voter or whatever, but basically that was really, really critical to get the thing to pass. And you know, I wish … we could make it all transparent, but I’d rather have this law than not.”[1]
  • In a 2012 videotaped interview with PBS, Gruber stated that at the aforementioned July 20, 2009 White House meeting, he and President Obama had brainstormed about how they might bring to fruition their mutual desire to place a 40% tax on a portion of the value of high-end insurance plans—those costing more than $10,200 for an individual or $27,500 for a family—that employers provided for some of their workers. Describing Obama as “a realistic guy” who understood that policy holders would be opposed to paying such a tax, Gruber quoted the president as having conceded that this “is just not going to happen politically” unless the tax could be dressed up as something else. As Gruber put it, Obama wondered aloud how they might “manage to get there through phases and other things.” “And we talked about it,” said Gruber. “And he was just very interested in that topic.” By Gruber’s telling, this conversation “ultimately became the genesis of what is called the ‘Cadillac’ tax in the healthcare bill.”
  • Video footage of a November 2012 speech which he delivered at the University of Rhode Island, showed Gruber detailing the immense deception that pervaded the Cadillac Tax concept. Specifically, he could be seen praising then-Senator John Kerry as a “hero” for reframing the issue and saying—to voters to whom it had theretofore been “politically impossible” to “get through to”—“No, no, we’re not going to tax your health insurance, we’re going to tax those evil insurance companies. We’re going to impose a tax that [says] if they sell health insurance that’s too expensive, we’re going to tax them.” “So basically it’s the same thing,” Gruber explained in the video, “we just tax insurance companies, they pass on higher prices that offsets the tax break we get and ends up being the same thing. It’s a very clever, you know, basic exploitation of the … lack of basic economic understanding of the American voter.”
  • Similarly, in a videotaped October 2013 speech at Washington University in St. Louis, Gruber reiterated how the Democrats had been able to pass the Cadillac Tax “because the American people are too stupid to understand” that taxing the insurance companies is no different than taxing the individual policy holders.
  • In a 2011 videotaped conversation about Obamacare, Gruber likewise denounced the “terrible policy” of not taxing high-end, employer-provided insurance plans as a “regressive, inefficient and expensive tax subsidy” that “politically [is] really hard to get rid of.” “[T]he only way we could get rid of it,” he recounted, “was first by mislabeling it, calling it a tax on insurance plans rather than a tax on people, when we all know it’s a tax on people who hold those insurance plans.”
  • In that same 2011 video, Gruber stated that implementing the Cadillac Tax involved yet another major deception as well: scheduling the tax to take effect “late, starting in 2018.” “[B]y starting it late,” he explains, “we were able to tie the cap for ‘Cadillac Tax’ to CPI [Consumer Price Index], not medical inflation,” the latter of which is higher than the former. “What that means is the tax that starts out hitting only 8% of the insurance plans essentially amounts over the next 20 years [to] essentially getting rid of the exclusion for employer-sponsored plans.”[2]  And because by then the government would have grown accustomed to counting on the income generated from that tax to cover its operating expenses, the tax would be virtually impossible to eliminate. Said Gruber: “[A]t that point if they [unions, employees, etc.] want to get rid of it they’re going to have to fill a trillion-dollar hole in the deficit…. It’s on the books now.” (Senator John Kerry once described Gruber as the Democrats’ “guide” in advancing the Cadillac Tax.)

As the aforementioned videos became a public-relations disaster for Democrats in late 2014, conservative news outlets continued to delve into Gruber’s background.

  • They pointed out, for instance, that in January 2014, Gruber had acknowledged that Democratic assurances about the Affordable Care Act’s potential for reducing Americans’ healthcare expenditures were utterly fictitious. Indeed, even though the White House’s official blog had cited Gruber’s “objective analysis” as solid evidence that Obamacare would lower insurance premiums, Gruber now conceded that promises of cost savings were nothing more than a “misleading motivator” designed to fool an ignorant public.
  • Nor was this the first time that Gruber had made such an admission. Investigative journalists unearthed a March 11, 2010 speech he had delivered at the College of the Holy Cross, where he affirmed that forecasts about Obamacare’s anticipated cost-cutting were highly deceptive: “Barack Obama’s not a stupid man, okay? He knew when he was running for president that quite frankly the American public doesn’t actually care that much about the uninsured…. What the American public cares about is costs…. [But] no one has a politically feasible way right now to bend the cost curve, it just doesn’t exist.”

Drowning in negative publicity vis-a-vis Gruber’s long track record of mendacity, the Obama administration attempted to distance itself from Gruber and portrayed him as nothing more than a fringe player in the creation of the Affordable Care Act. The president dismissed Gruber as merely “some adviser who never worked on our staff.” But a series of emails provided by the House Oversight Committee to the Wall Street Journal in 2015 revealed that Gruber in fact had worked very closely with the administration to shape the law. According to the Journal, the emails revealed “frequent consultations between Mr. Gruber and top Obama administration staffers and advisers in the White House and the Department of Health and Human Services on the Affordable Care Act.” Moreover, they showed that Gruber had “informed HHS [the Department of Health and Human Services] about interviews with reporters and discussions with lawmakers, and he consulted with HHS about how to publicly describe his role.”

On November 18, 2014, Fox News reporter David Webb tracked down Gruber and asked him, on camera, to address some of the aforementioned videotaped remarks that he had made regarding the “stupidity of the American voter” and the subterfuge that had been central to the passage of Obamacare. Clearly agitated, Gruber walked hurriedly away from Webb and repeatedly stated that he had “no comment.”

In a November 2016 interview, Fox Business’ Maria Bartiromo confronted Gruber with the fact that: (a) Obamacare was experiencing double-digit-percentage hikes in the cost of monthly premiums, (b) insurance companies were leaving the Obamacare exchanges in droves, and (c) small businesses were either not hiring new workers or were converting full-time positions to part-time in order to mitigate the high costs of Obamacare. Gruber, in turn, accused Bartiromo of “making up facts” about Obamacare, which “has actually saved people money.”

In a May 2017 appearance on the program CNN Newsroom, Gruber argued that President Donald Trump, and not former President Obama, was to blame for the fact that a large number of insurers were continuing to withdraw from Obamacare. When anchor John Berman noted that “it was happening under President Obama” as well, Gruber countered: “No, no, no, let’s be clear, last year’s [2016] premium increases were simply making up for the fact that premiums came in 20% below what was expected. Last year’s premium increases [were] a one-time catch-up, and by every projection before the election, that was a one-time catch-up. Insurers were now profitable, and premiums were expected to go up at normal rates this year. Only since President Trump has introduced massive uncertainty into the market, through refusing to pay the cost-sharing subsidies that are part of the law, through the diddling back and forth with the mandate, is it in, is it out, etc. That has caused insurers to say, look, we don’t need to be part of this game…. So, let’s not pin this on Obama, okay? This is President Trump’s problem, and he’s caused it.”

In addition to his work at MIT, Gruber has also served as director of the Health Care Program at the National Bureau of Economic Research, and president of the American Society of Health Economists. He is a member of the Institute of Medicine, the American Academy of Arts and Sciences, the National Academy of Social Insurance, and the Econometric Society.

Gruber also has extensive experience as a writer and editor. At various times, he has been an associate editor with the Journal of Health Economics, the Journal of Public Economics, and the American Economic Journal. Moreover, he has authored three books: (1) Public Finance and Public Policy (2005), which has since been updated in several revised editions; (2) Health Care Reform: What It Is, Why It’s Necessary, How It Works (2011), explaining the Obamacare law in comic-book format; and (3) Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream (co-authored with Simon Johnson in 2019).

Further Reading:Jonathan Gruber’s Curriculum Vitae” (EconomicsMIT.edu); “Jonathan Gruber” (Economics.MIT.edu).

Footnotes

  1. Click here for video of this excerpt. Click here for video of the entire panel discussion.
  2. The Daily Caller elaborates on the significance of the Cadillac Tax’s delayed onset: “Gruber says the delayed onset is key — it allowed Obamacare’s authors to tie the Cadillac tax to the Consumer Price Index. The CPI doesn’t rise as fast as inflation — meaning that while the dollar-threshold for the Cadillac tax will grow, it’ll grow more slowly than the cost of health insurance. That means that eventually, all employer plans will get caught in the Cadillac tax…. And that takes away much of the incentive employers have for offering it in the first place.”

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